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If Elon Musk can increase Tesla's market value 12-fold in the next 10 years, he may be entitled to a maximum of $56 billion in stock awards (likely lower if more shares are sold to the public). This, along with the ballooning of Musk's existing $12 billion share in his company, and his stake in SpaceX and other companies, could help Musk become a Kardashev I trillionaire alongside Jeff Bezos:
A new payment plan for the CEO was approved by Tesla (TSLA) shareholders Wednesday, a spokesperson confirmed. The incentive-based package essentially states that if Musk hits a series of performance milestones between now and January 2028, and he drives his electric car company's market value 12 times higher — taking it from $54 billion to $650 billion — he'll become astronomically rich.
Now, if Musk does drive a 12-fold increase in Tesla's market value, that doesn't necessarily mean the price of a single share in the company will be 12 times larger. The company can do things like issue new stock that could dilute the value of existing shares. But let's assume Musk's Tesla stock would grow at least 10 times more valuable. That would mean just the shares Musk owns today would be worth $120 billion.
Plus, reaching the agreed upon milestones means Musk would get additional stock awards. According to the new compensation plan, Tesla estimates the value of the stock awards to be $2.6 billion, using accounting methods for estimating the cash value of stock options. But if Tesla's market value balloons just as the payment plan hopes, those stock awards could be worth nearly $56 billion, according to a public filing.
Also at Reuters, Fortune, and CNBC.
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(Score: 5, Interesting) by bob_super on Friday March 23 2018, @01:11AM (6 children)
Reminder: it requires Tesla to be more valuable than most of the legacy car manufacturers, combined.
The guy has a huge goal to meet, and gets a huge reward if it is met, making all the shareholders very very happy. Isn't that what the Street always says should happen?
Considering the taxes on that money, and the history of the guy in re-investing his cash into new ideas which keep the US ahead, that's not the most shocking outcome for such an insane success.
What's actually novel is that if he screws up, he gets nothing. That would be frowned upon by most.
(Score: 0) by Anonymous Coward on Friday March 23 2018, @01:21AM (2 children)
He'd have to screw up pretty royally to wind up with absolutely nothing. Even if he doesn't hit any of the milestones (each of which will reportedly award him more stock), he already owns ~22% of all the existing shares in the company.
(Score: 5, Insightful) by bob_super on Friday March 23 2018, @01:29AM (1 child)
True.
But tell that to all the executives who already own enough of their company to be at least millionaires if not billionaires, yet get pay packages with 7-figure incomes, guaranteed grants every year, and a golden parachute.
(Score: 0) by Anonymous Coward on Friday March 23 2018, @09:56PM
(Score: 0, Troll) by Anonymous Coward on Friday March 23 2018, @04:01AM
Also keep in mind how little he's contributed to society in order to get that much money.
Most of the businesses aren't profitable, some of them will never be profitable. The only one that's done really well was PayPal and that's more or less a parasite that contributes nothing that can't be had by less evil companies.
(Score: 3, Insightful) by JoeMerchant on Friday March 23 2018, @04:07AM (1 child)
With >$12B in the bank, he can play those games.
And another $56B isn't money at that point, it's power.
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(Score: 2) by HiThere on Friday March 23 2018, @04:42PM
Yes. That's worrying. OTOH, it's less worrying than the folks who have that kind of power right now. At least he's been using it in interesting, and possibly important, ways so far. (I'll admit I'd like to leave out that "possibly", but we need to face the fact that real failure is a possibility.)
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.